Rudik Setiawan, Organic Tofu King

Monday, 01 October 2012

This young entrepreneur from Malang is doing something different, namely, making snacks out of organic soybeans. The result is even tastier tofu that is not scorched, not sour and which is healthier as it does not use preservatives. Thanks to his hard work, Rudik now enjoys a turnover of up to Rp 150 million per month.Rudik’s “Rainbow Tofu” (his brand name) has benefited from the ongoing interest in healthy living, including the widespread warnings against eating food products that contain preservatives. “After I entered this market, I quickly discovered that the opportunities were wide open,” said Rudik, who calls his business RDS (the letters RDS stand for the names of his three sons, Rasendria El Furqonia, Dzufairo El Kamila and Muhammad Sirhan Syahzani)
With an organic label, Rudik is able to command higher prices. While non-organic tofu sells for Rp 1,400 per piece, organic tofu can fetch Rp 3,000 per piece for normal quality (red rainbow label). As for the higher quality togu (green rainbow label), this can fetch up to Rp 6,000 per piece in a supermarket. Although more expensive, Rudik says, RDS is nevertheless in big demand among upper middle class mothers who care about healthy living.
With a high selling price, he is not worried about increases in the price of soybeans. Even when soybean prices surged from Rp 3,500/kg to Rp 8,000/kg some time ago, Rudik was able to continue in production. As he was able to cover all production costs (overheads), he was thus still able to get a margin. The soy bean raw materials used by Rudik are produced by certified organic soybean farmers in rural East Java.Seed Capital Loan
Rudik’s entrepreneurial spirit emerged at an early age when he was in grade 3 of high school in 2001. It all started when the land next to his house was leased by a businessman to set up a tofu factory. Rudik then also invested some capital in the business, with his first investment being Rp 25 million that he got as a loan from a neighbor. In 2003, the business went bankrupt as the owner shirked his responsibilities, taking the entire business capital with him. Rudik then had to settle all of the business’s outstanding obligations on his own.
However, Rudik managed to survive. With perseverance, he got the money back by selling tofu and some land owned by his father. Then on May 29, 2004, Rudik renamed his business RDS Tofu. With capital of Rp 15 million from the proceeds of the land, he was ready to go independent. However, the challenges were still not over, including the effort by another businessman to lure away his staff by offering them higher wages. As a result, Rudik was left with only 6 employees after the business had just been running for a month.
Rudik was not discouraged and managed to keep the business going. In doing so, he was able to avail of a large poor of unemployed young people in his village of Klampok, Singosari, Malang. “I’m was looking for new people who did not really know much about the world of tofu. That’s why I was able to educate them from scratch,” said Rudik, a graduate of the alumnus Department of Mathematics, Brawijaya University, Malang.

Growing Together
Rudik’s business started to expand. He deliberately focused on the middle class and above as his target market as people in these income brackets were aware of the importance of a healthy diet. Rudik also approached civil servants, especially village and district officials, to help sell his products as they were able to direct tourists visiting Singosari, Malang, to buy his products as souvenirs characteristic of the area. Indirectly, a lot of the success of the RDS tofu business was thanks to word-of-mouth promotion.
Rudik’s business experienced rapid growth taking the runner-up spot in the 2009 Mandiri Young Entrepreneur (WMM) competition in the Graduate Students & Alumni Industry and Services category. As a result, his turnover increased threefold  compared to before. Whereas previously his turnover was around Rp 50 million per month, it currently stands at some Rp 150 million per month based on a production capacity of 2000-2500 pieces of tofu per day. He does not only produce tofu, the solid waste (soy pulp) from the production of the tofu is used for animal feed, tempeh, soybean flour, soy sauce and cake, while the liquid waste (whey) is processed for use in the acidification process for soymilk as a side-product of the tofu production process, as well as for feeding to cattle, and for the production of cooking vinegar, nata de soya, liquid fertilizer and biogas production with a capacity of 7,000 liters per day.
Rudik says that the coaching and training provided by Bank Mandiri after he came second in the WMM competition have significantly contributed to the development of his business. “Not just the coaching and entrepreneurship training that I got, but also customer experience training and mentoring. During the one-year of entrepreneurship mentoring, I do not have to pay a thing. If converted into money, it would have been worth approximately Rp 50 million,” explained Rudik, who holds a doctorate from the Muhammadiyah University in Malang. In addition, the bank also helped to promote his business using such media as radio, newspapers, magazines and TV. Rudik also participated in a number of exhibitions held by Bank Mandiri. In fact, he was sent to China to study the origins of tofu.
PT Bank Mandiri (Persero) Tbk.

Tips for Success

  • Read the opportunities and determine the target market segment. People’s awareness of healthy living through consuming organic foods offers promising business opportunities.
  • Believe in yourself and don’t give up, and believe in what you are doing.
  • The greatest capital in a business is not money, but market network market and people’s trust.
  • Find added value from the business .

Special Characteristics of RDS Organic Tofu

At first glance, there is no difference between RDS Pelangi Tofu and other similar products. However, in reality, RDS is of superior quality as organic soybean tofu that is free of preservatives and formaldehyde, and which is tasty, hygienic, practical, suitable for us as an additive, and in the making of stuffed tofu and spiced tofu. Other pluses are the aroma of soy, non-acidic, low water content, or drier and chewier. Its plasticity comes not from preservatives, but from its processing and quality raw materials.

Marketing Strategy

According to Rudik, a marketing strategy should always have regard to the traditional market base. “For Red Rainbow (regular tofu), this accounts for as much as 80% of our production and 20% of our profit, while the elite market (Green Rainbow for supermarkets) accounts for 20% of our production and 80% of our profit. Green Rainbow only accounts for 20% of production as the market is susceptible to crises,” he explained. He said that if there are 5 customers, where 4 provide profit while one person just gets us to break-even point, then this last customer must be retained as he can help cover the cost of daily production (overheads).

Name: Rudik Setiawan, S.Si, M.Agr
Place and Date of Birth: Malang, October 4, 1984
Education: Undergraduate Degree in Mathematics, Brawijaya University, Malang (2008) Master’s Degree in Agribusiness, Muhammadiyah University, Malang (2011)
Position: Owner of RDS Tofu
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Achievement & Awards

  • Nominee Asean Innovation Award 2011
  • 2011 Youth Entrepreneurship Pioneer Award from Ministry of Youth and Sport
  • Winner of 2010 Youth Business Innovation Contest from Ministry of Youth and Sport
  • Finalist in British Council’s Community Enterprise Challenge 2010
  • Second Place in 2009 Bank Mandiri Young Entrepreneur Awards at national level
  • Second Place in Dji Sam Soe 2005 Young Entrepreneur Award from PT. HM Sampoerna

Source : Ide Bisnis Magazine